Capital Gaines On Selling Your Home
With the passage of time the tax laws have rapidly changed with respect to the sale of your home. The present law says that if a home that you have bought is owned by you and if you have stayed in that home for 2 to5 years then you would not be asked to pay any capital gains that you earn after selling the home.
The rate decided for this are up to $500,000 profit for married couples filing jointly, or $250,000 profit for an individual. There are no limits in buying or selling a home after every 2 years with the similar exclusion.
If there are exceptions to this existing rule like you have stayed in the home for less than two years then the exclusion will vary as per the following:
Health issues - If you are moving away from your own home because of some genuine health reasons, the IRS provides exclusion from the capital gains. The doctor’s recommendation regarding change of residence due to health reasons has to be obtained. The reasons for such move could be because of getting better medical facilities which otherwise wouldn’t have been possible in the present location. Family members can b included in this group.
Relocation due to change in employment - If a person owning the home or co-owning such as a spouse moves from the home because of employment change, then the person is applicable for the exclusion. But your new place of employment should be at least fifty miles away from your own home that you have sold.
Other unforeseen issues - All natural or manmade disasters, act of war or terrorism, death, unemployment, divorce or legal separation, multiple births from same pregnancy, or a change in employment that leaves the person with lesser salary and thereby making it impossible for the person to handle ordinary living expenses. In all such cases, the capital gains can be excluded from tax.
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